Growing concerns over owner liability

After a recent apartment complex fire in Melbourne, a peak strata body has urged a state government to amend building defect legislation.

The outcome of an investigation into the Lacrosse apartment building fire has been used to push the case for legislative reform in other Australian jurisdictions.

Last week, Strata Community Australia issued a call for the NSW State Government to amend construction laws to put the onus on building rectification back on developers and construction companies, stating that current legislation “paves the way” for owners to be left with expensive rectification bills.

The Melbourne Metropolitan Fire Brigade found that the imported aluminium cladding used on the Lacrosse building was in breach of the Building Code of Australia, and facilitated the fire to spread across multiple levels of the building.

As a result, apartment owners and the building’s strata committee were recently issued with an order seeking that the building be made compliant.

According to Kim Henshaw, the Strata Community Australia CEO, apartment owners are facing a $20 million rectification bill.

“Owners in a Melbourne property are looking at a bill totalling $20 million, after an illegal cladding product was found, and there will be thousands of NSW property owners wondering what this means for them if they wind up in the same situation.”

Mr Henshaw is using the case as justification for legislative change in NSW, stating “our understanding is that local authorities don’t have the ability to direct rectification bills to anyone but the property owner”.

“For the sake of a property sector expected to house up to 50 per cent of the state population by 2030, we want the NSW State Government to urgently review legislation surrounding the rectification of building defects,” he said.

“The standard of local construction is worryingly low, and that offers no guarantee that this won’t touch the lives of countless NSW property owners.”

Mr Henshaw cited a 2012 University of NSW study, which found that 85 per cent of strata title owners reported building defects in new buildings as proof of the need for change.

“Make no mistake, property owners and managers in NSW should be on notice, because on what we’ve seen so far, this issue could turn their lives upside down,” he said.

“It’s a no-brainer, the NSW State Government should be seeking out builders, developers and others involved in the construction process in their search to rectify building defects.”

No fatalities resulted from the 2014 Lacrosse building fire, which inflicted fire and water damage on multiple apartments.